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Americans are leaving a lot of money on the table.
From food assistance to economic stimulus checks, billions of dollars in government benefits are unclaimed each year. That’s a serious problem, says Wharton marketing professor Wendy De La Rosa, because those programs are social safety nets designed to keep the most vulnerable Americans from falling through the cracks. In fact, government benefits have been shown to increase societal welfare by decreasing hunger, increasing educational outcomes, and improving physical and mental well-being.
“Ultimately, we don’t want there to be suffering,” she said in an interview with Wharton Business Daily on SiriusXM. (Listen to the podcast above.)
One way to narrow the participation gap among beneficiaries is to expand their feelings of psychological ownership over the money, according to a new study from De La Rosa. Across four large experiments, she and her co-authors found that they could increase the likelihood of people tapping into benefits by 20% to 128% just by manipulating the message received about it. When they changed the wording on a text or email from the generic, “You may be eligible for this credit,” to the specific, “You have a benefit that belongs to you,” the interest in getting government benefits shot up significantly.
“Language matters. I wouldn’t be a marketer if I didn’t believe that language matters,” De La Rosa said. “If there’s a problem, one of the first things we look at is how [a message is] being communicated. And is that communication truly resonating with the needs of consumers — in this case, applicants to government benefits?”
“Language matters. I wouldn’t be a marketer if I didn’t believe that language matters.” –Wendy De La Rosa
The paper, published last month, is titled “Psychological Ownership Interventions Increase Interest in Claiming Government Benefits.” The co-authors are Eesha Sharma, business administration professor at Dartmouth College’s Tuck School of Business; Stephanie M. Tully, marketing professor at Stanford University’s Graduate School of Business; and Eric Giannella and Gwen Rino, data scientists with Code for America, a nonprofit aimed at improving government services.
Not Feeling Autonomous
The results of the study should get the attention of policymakers and elected leaders who want to help their constituents claim what’s theirs. In California, for example, more than 40% of families eligible for the Supplemental Nutrition Assistance Program don’t apply. And the Internal Revenue Service reported it has more than $2 billion in COVID-19 economic stimulus checks that have never been cashed. Those checks were sent automatically to tax filers, but people with no income had to apply, which can be a labyrinthine process.
De La Rosa argues that one of the reasons people are not applying for government benefits is that they simply don’t like asking help. “We don’t feel autonomous when we ask for help,” she said. “There’s this general aversion to seeking assistance.” That’s why manipulating psychological ownership — or the sense that something is yours — can help. “When I feel like I’m claiming something that’s mine, I don’t feel like I’m asking for help,” De La Rosa said. The concept of psychological ownership goes back decades and usually centers around feelings towards products or organizations, such as the loyalty to a shade of lipstick or a college football team. But De La Rosa said it can also empower people to stake their rightful claim to something.
Manipulating how we communicate about government benefits is a simple and inexpensive way to increase participation, and it’s worthy of consideration in the larger discussion about social safety nets, De La Rosa said. After all, the billions of dollars Congress designates each year for assistance doesn’t matter if it doesn’t reach the people who need it.
“We’re at this junction as a country where we are facing massive income inequality, an increase in poverty, an increase in childhood hunger. How can we help address that?” she said. “I would encourage local leaders, state and local government, even the federal government to start to rethink their framing over the government benefits they’re providing.”